K10 million deal queried

By KONOPA KANA

FINANCE Secretary Steven Gibson fell short of explaining in full, allegations of a K10 million payment made to Global Construction Limited for a forest project in Vanimo during the formation of the new government.
  Monday the Post-Courier interviewed Mr Gibson, who has now been implicated with misappropriating up to K10 million (K9,996,855.00) in the form of payment of monies from the log export development levy trust funds to Global Construction Limited during the formation of the new government.
Mr Gibson said the payment was made to build a road network in Vanimo Green based on a contract between National Forest Authority (NFA) for the benefit of the landowners.
When asked to verify which contract he was refereeing to Mr Gibson said:”Finance Department is a paying office.
The agreement between the government and Global Construction was in place so I have to source the money to fund the project in Vanimo.”
However, Mr Gibson could not directly give a straight answer as to who authorised the payment and could not verify if there was any public tender for contractors to bid for the project. He told the Post-Courier that a statement would be made available to respond to the matter soon.
The matter revealed by a private investigation firm that was conceived back in 2006, having similar nature of work as the National Fraud and Anti-Corruption Directorate, has so far in their operations processed 10 people and jailed three of them.
Meanwhile, Prime Minster Peter O’Neill and Police Commissioner Tom Kulunga have been made aware of the matter, with a request to suspend Finance Secretary Mr Gibson to allow police to effectively carry out investigations. The Police Commissioner could not comment last week but advised the investigation report was made known to him.
According to the private investigation firm, all procurement processes and procedures were not followed which is a breach of the trust instrument.
Only one bidder tendered for the project and the payment was made during the period of the formation of the new government.
The firm claimed that the Mr Gibson as the custodian and chief accountable officer of all the public funds failed to follow set procedures.
According to a letter to Prime Minister O’Neill dated August 7, 2012, the secretary of the department of Finance Mr Gibson signed and authorised the release of monies from the Log Export Development Levy Trust Account.
There were serious breaches of mandatory provisions in the Public Finance Management Act (PFMA), the letter stated.
The alleged transaction occurred during the formation of the government with no formal contract awarded by the Central Supply and Tenders Board (CSTB). There was also no National Executive Council (NEC) decision or approval for such a transaction involving public monies.
According to Information obtained by the Post- Courier last Friday, the managing director of PNG Forest Authority and the Secretary for Planning as well as the CSTB have all given their approval for the release of the K9,996,855 to Global Contractions Ltd.
This payment was made through the log export development levy trust account, BSP cheque number 000025 on the August, 12 2012 with a contract number CSTB 2385. The contract was awarded to Global Constructions Ltd and cleared by the state Solicitor for upgrading and sealing of Pasi to Krisah road in Vanimo Green District Block 3, 4 and 5.
Meanwhile, in a letter dated July, 9 2012 to the PNG Forest Authority, Mr Gibson clarified the log export development levies for Vanimo Green River District for the funding of the road construction.
Mr Gibson said in his letter:” I have received your letter dated June, 12 2012 on the same subject referring to the National Planning Secretary’s letter dated June 7 which requested K10 million to be released by Log Export Development Levies for the said GoPNG contract”.
According to the letter Mr Gibson also said the issue raised about a court order OS (JR) 713 of 2009 (Levies for Vanimo Blocks 3, 4, and 5) and sought National Forest Authority to verify the court order and advise on required action.